Which of the following is true about using sample data?
A) All samples have the same characteristics and hence always adequately represent the underlying population.
B) It can limit the ability to predict uncertain events that may occur because potential values outside the range of the sample data are not included.
C) It is better to use sample data than trying to identify the underlying probability distribution and fitting a theoretical distribution to it.
D) Using sample data in a decision model increases the ability to predict uncertain events.

Question

Quizplus · Accepted Answer

Sample data is a subset of the population and may not always provide a complete representation of the underlying population. Therefore, it can limit the ability to predict uncertain events that may occur because potential values outside the range of the sample data are not included. Option A is incorrect since all samples may not have the same characteristics as the underlying population. Option C is incorrect since fitting a theoretical distribution can provide more accurate predictions than using sample data alone. Option D is also incorrect since using sample data does not necessarily increase the ability to predict uncertain events; it depends on the quality and representativeness of the sample data.

Which of the Following Is True About Using Sample Data